To give or not to give — the government is faced with a piquant situation over funds provided for developmental activities across the Maoist-affected states. A recent government-funded study on the architecture of Maoist finances has suggested that it is "not possible to bottle up extortion sources for Maoists right away".
"Because if the government holds back developmental funds — mainly given to build roads, primary health centres, schools and bridges in Maoist-affected areas — it will only result in further alienation of people from the state," it was stated in the confidential report.
"Moreover, improving infrastructure and connectivity would enhance the scope for penetration of the state machinery, including that of the police," it adds.
This is not the first time that there has been a tacit admission of India's worst-kept secret. On September 24, 2010, a parliamentary committee had told the government that its own funds meant for development are finding their way into Maoist coffers.
The latest study that has been drafted after field visits to Chhattisgarh, Jharkhand, Odisha and Andhra Pradesh during February-April 2013. It lists the main revenue sources for Maoists as mining industry, PWD projects, government schemes, development schemes and PDS, 'tendu' leaf collection, telecom companies and corrupt government servants.
Maoists maintain an extremely meticulous system of accounting and book-keeping with each level in the hierarchy maintaining a detailed statement of expenditure. For example, the balance-sheet prepared by the Maoists' North Telengana Special Zone (NTSZ) during its peak in 2001-2003 recorded an expenditure of R4,42,51,256, the income as R6,20,48,500 and an additional 562 gold biscuits.
Unlike the insurgent groups in the Northeast, Maoists are not known to pay monthly salaries to their cadre and expenditure is incurred mainly on weapon procurement, daily needs of the cadre and in maintaining war machinery, publication and propaganda work, and court-litigation costs for members and supporters.
"Another expenditure item is that of the central technical committee which has been tasked with the development and manufacturing of mortars and grenades," the official added.